Faith in big banks down amid high rates, Royal Commission

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High borrowing rates and the impact of the debate surrounding the Royal Commission are leading to customers becoming less and less happy with the major banks, according to a new survey by Roy Morgan Research.

The monthly report found that customer satisfaction in relation to Australia’s big four banks had decreased by 50 basis points to 80% in March, marking the third consecutive decline.

Norman Morris, Communications Director at Roy Morgan Research, said, “The home-loan rate increase announced by the big four banks in October appears to be negatively impacting customer satisfaction even now, months later.

“Furthermore, any adverse publicity regarding rate increases and the current high-profile speculation about the prospect of a Royal Commission into banking is likely to affect satisfaction with the big four in particular.”

John Flavell, CEO of Mortgage Choice, believes the flagging of consumer confidence is largely down to negative press, but believes levels of customer satisfaction will bounce back.

“Australia’s major banks have received a fair bit of negative press in the last few weeks. This negative press could be contributing to their recent slip in customer satisfaction levels,” he told Australian Broker.

“Moving forward, it is likely the government’s decision to increase ASIC’s surveillance powers through greater funding together with the Australian Banker’s Association recent announcement, will help to lift consumer confidence levels.”

Jeremy Fisher of Sydney’s 1st Street Home Loans agreed that the survey does not indicate a terminal falling away of consumer satisfaction with the majors.

He told Australian Broker, “We have more clients are questioning whether to support the big banks however once we educate the clients with the pros and cons of both options, we find the majority of clients feel more confident remaining with the big banks.”

However, Fisher warned that, “The big banks need to improve on the post-settlement support of existing clients. Existing clients deserve to be treated equally to new to bank customers.”